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All right new developments in China whether raising concerns about the future of the world's second largest economy.
Rising manufacturing costs including wages could spell trouble for China's biggest customers like the United States.
Meanwhile China's young and wealthy who of those entrepreneurs.
They seem to be taken their talents in their money to other countries.
We've got Gordon Chang they offer -- the coming collapse of China.
He joins us now.
-- you always have another negative Chinese story to share with us if but -- I'm sorry Charles.
Didn't think these entrepreneur or is that that a leaving.
Why are they leaving China.
I think there's a couple things going on here first of all -- can see the economy is starting to turn.
You know growth is slowing but inflation remains very very high but more important there's the partial re nationalization of the economy that means a bigger state sector and a smaller its private sector.
Fewer opportunities for China's entrepreneurs that as I think starting to unnerve them.
So what Gordon that they -- -- -- there's is that this if you well were they gone.
Lot of them are going to Canada you know Vancouver had this incredible February where the real estate market increased by like 70% in terms of sales volumes.
You see the shopping tourism Chinese coming to the United States.
And so clearly young North America will benefit from this and I imagine Australia will as well because traditionally Chinese have going to Australia.
-- -- I mentioned her book in the -- the coming collapse of China so you have more or less had China to sort of imploded this time.
But almost everyone else the narrative is that this is a country.
With over a billion people.
They've they've grabbed on -- capitalistic ideas if you will in -- seem to be a long term growth juggernaut -- you disagree.
Well you know you can have a long term growth juggernaut which you can have some real problems in the interim and that's what's happening to China right now as the trends are going negative and as you have the political system start to Harden because of the transition.
The next set of leaders are probably gonna be even more nationalistic prominent.
Economy point of view and that's not really good because China is closing up that means fewer opportunities for foreign investors like us but also for domestic entrepreneurs who have really driven the Chinese economy over the last three decades.
Militants are seeing no I think you -- that though and I always argued have a billion people on bicycles and did you give my car you can never put him back on a bicycle what are they crazy.
For the government to go the opposite direction considering all the success they've had.
Yeah I mean it is crazy but you know sometimes governments do stupid things and and that's what we're seeing right now with Hu Jintao the current leader since 2006 has been trying to narrow the opportunities war.
Private -- to -- Norris for foreign investors because they want to build up the so called national champions they want fifty of the world's 500 largest companies to be Chinese.
By the middle of this decade and they're using the government took effect that result.
But I got to tell you want when Desmond revolution initially began the first official word from China when I read between -- lines it sounded to me as if they know that ultimately.
China will have to be a democracy.
And if anything they like the slow do you think it's that at the -- the realization for them now is that at some point.
Be a part of China.
They -- I think most -- Chinese believe that a one party system is no longer appropriate for China's modernizing society and people on the Communist Party realize that but when you talk about the guys at the top the nine people on the Politburo standing committee.
They've been intransigent and that's really the problem because you -- Chinese society moving forward you got this political system moving backward.
That's an earthquake.
This earthquake short short lived do you think it's the beginning of something much -- that collapsing you know warning us about.
Yeah I really see problems for the Chinese economy and for the political system towards the end of this year but you know eventually you're right you know China with a billion.
For people is gonna do very well it just is gonna have some real problems bumps in the road due to -- President Obama -- They're gonna have those big bumps in the road I -- I gotta let you go about if you can quickly.
What does it mean for America than.
What -- okay because we got enormous internal market we got a strong economy and you know we've got a great system.
You have award we get our key goods from -- outlets got -- to go -- that though he'll answer that there's Gordon -- get a -- -- thanks a lot have a very we.
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